Reply With QuoteYep, totally easy. Low risk, high reward! Thats the definition of stock markets.
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Hey Guys,
You hear stories about people making decent coin from stocks all the time, but I'm wondering what the reality of it is?
I've always been a low risk-high reward person and while it's something that's pretty rare, I think that it's definitely out there...and I'm wondering if stocks is something that you can make steady income with if you're smart enough about it? Is it really as easy as buying in before companies get fda & ce approval, watching the stocks go up steadily, and selling when the time is right?
There seems to be a couple of you who are doing decent with stocks, and I was hoping that you could point me in a direction? Where do I start? What can I read? What do I need to learn to do exceptionally well? Etc.
I've never been a gambler, so I've avoided stocks for a very long time, but after hearing about the money some of my friends are making, I'm wondering if they're talking **** or if it really is possible to be making a killing.
I'd really appreciate any feedback and I never forget who helps me out (especially when it comes to money)
Last edited by knowledge; 04-12-2012 at 03:32 AM.
Yep, totally easy. Low risk, high reward! Thats the definition of stock markets.
all my posts are serious; internet is serious business
I would consider a bank stock that pays dividends but don't go too big when you're just getting into it.
TD's stock is worth $82.92 right now and their last dividend was .72 per share, which I believe is about .8% Over the last year their dividends have all been worth between .8 and .94% quarterly. So you make about 3.5% annually roughly we'll say. Oh, and the stock lost 2.38% over the year. So make that a return of like 1.1%. You can get that on a high interest savings account.
But last year was a bad year. I lost money.
BMO's stock pays higher dividends and is cheaper. It lost more last year also, so it could be good.
Personally I am going to buy 100 shares of Carnival Cruise Lines stock. They are way down right now, and if you own 100 shares when you cruise, you get $100 of onboard credit. (Free drinks!) It also pays .25 dividend per share, so if I cruise once a year I make $200 alone.
You can get on TD Waterhouse if you want to do it your self... or find a financial advisor.
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Getting into "stocks" implies a "pick and choose", daytrader strategy. It's a recipe to lose money, because it implies that you know more than the "market" does. And when I say the "market", I mean institutional investors, the old boy's club, and traders who get paid an awful lot of money to know things that you as an "unplugged" investor just will not have access to. Knowledge is power, and as an individual, you just don't have much of it. You certainly have way less of it than the professionals. Where there is money to be made in the market, the professionals are there early, and have taken away much of the margin based on how quickly they get to the table and how much money they bring. There's not much left over for day traders.
Mutual Funds were designed to take this risk out of investing, to a certain extent. With online tools like TD Waterhouse, BMO Investorline, I'm sure other banks have them, you can either pick a portfolio of stock which can be diversified all kinds of different ways (which is what a mutual fund is) or you can pick individually.
Be aware that for every day trader or non professional that has made money on picking stocks, there's a trail of broken finances from people who lost money.
My personal advice is buy and hold, be in the market for the long term. Yes, you'll miss some opportunities, but you'll avoid an awful lot of risk as well.
Past: 03 Suzuki Volusia, 03 Kawasaki Nomad 1500, 06 Suzuki DL650 V-Strom, 98 Suzuki TL1000R.
Present: 1982 Yamaha Seca 750, 08 Yamaha FZ1, 04 Suzuki DL1000 V-Strom
Cela est bien dit, mais il faut cultiver notre jardin. Voltaire
Originally Posted by OpenGambit
I would consider a bank stock that pays dividends but don't go too big when you're just getting into it.
TD's stock is worth $82.92 right now and their last dividend was .72 per share, which I believe is about .8% Over the last year their dividends have all been worth between .8 and .94% quarterly. So you make about 3.5% annually roughly we'll say. Oh, and the stock lost 2.38% over the year. So make that a return of like 1.1%. You can get that on a high interest savings account.
But last year was a bad year. I lost money.
BMO's stock pays higher dividends and is cheaper. It lost more last year also, so it could be good.
Personally I am going to buy 100 shares of Carnival Cruise Lines stock. They are way down right now, and if you own 100 shares when you cruise, you get $100 of onboard credit. (Free drinks!) It also pays .25 dividend per share, so if I cruise once a year I make $200 alone.
You can get on TD Waterhouse if you want to do it your self... or find a financial advisor.
Just to clarify for the OP. You only lose money when you decide to cash out your stock when it is worth less than what you paid for it. I recently bought CIBC stock last year when the stock went from $84 down to $71. I bought a crap load. I will get about $1200 a year in dividents and the stock is now worth about $75 so if I cash out I would make money.
But if you buy a stock that pays divident then the stock would have to drop a bit before you really see a loss. Your stock may reduce in value but if you dont cash out and wait until it bounces back then you really dont lose.
Low risk high reward doesn't exist until you become an "accredited investor", or can othewise take advantage of exemptions.
Sorry.
I personally don't make trades in less than 5 grand blocks (using TD's discount brokerage). but I am pretty diversified.
the major things you need to know:
1. anytime you pick a single stock, you are gambling.
2. no more than 10 % of your entire porfolio should be in singles that you trade on a one by one, these are for "fun".
3. know your tax consequences, understand why your stock in Coca Cola should be in your RRSP, your stock in RIM should be in your TFSA, and your stock in TD held normally.
4. lots of brokerages have "dummy" accounts. use them for a few months before you use real money
5. or, ignore everything I said and throw it all into gold and silver like the paranoid among us
All of that being said, if you are just starting out, look at mutual funds and ETFs before you buy any singles.
Last edited by OpenGambit; 04-12-2012 at 09:52 AM.
This post does not provide any legal advice and readers should consult with their own lawyer for legal advice.
Know this, the stock market is a shark tank and you and I and all retail investors all small fish. It is not for the faint of heart and it is not a place of low risk, high reward.. Risk = reward.
I think your friends who brag might just be like every other gambler that speaks of their wins but not their losses. I don't know anybody with credible experience that can call it right everytime.
The stock market is far removed from being a simple vehicle of driving capital into companies. If your perception is that it is a place to simply buy low and sell high - you got another thing coming. We're talking short and distort schemes, pump and dumps, price manipulation, HFT (high frequency trading) machines running algorithms that can crush stocks and institutional investors like JP Morgan that do shady stuff all the time. It is very much a gamed system. Approximately 2/3 of all trade volume in the US is now coming from HFT algo machines.
Markets are getting more and more volatile and as of late, global macro issues/sensationalist news plays a much bigger role in setting the tone in the marketplace. The market often over-reacts to bad news and just last week I watched a stock I used to play last year lose half its value in a couple days over a not really that bad but percieved bad news report. You should always remember that something is only worth what the next sucker is willing to pay for it. And thats very true in the markets.
So my advice is, if you are looking at preserving capital and low risk, the markets might not be a good call. But, a lot of stocks are relatively "cheap" these days and there are plenty of suckers that come along so you could get into the markets now and probably make some good money if your time horizon is intermediate to long term.
If you want to dabble - get a TFSA/trading account through your banking institution. They'll usually give good trade rates if you have over a certain amount in product. For example. CIBC will give you $6.95/trade if you have over 100K in product. A mortgage counts.
So far I've been able to manage my investments better than anything I have in MFs but it takes a lot of diligence, homework, time and attention. Become intimately familiar with the companies you invest in even if you think it's a long term hold. Yet, still no grantees. Best advice I can give is don't get emotionally attached to a stock - thinking you'll wait for it to come back up to sell. Some of my best decisions have not been picking winners, but deciding to cut out after loosing (sometimes lots) and reallocate somewhere with more potential.
Remember this thread
Anyone who listened would have doubled their money.
RISK - - HOW 90% of people lose trading!
http://www.youtube.com/watch?v=LbrqehFLhNg
That was an easy call. You knew the governments were not going to let the markets go down. They pumped 7 trillion to prop up the markets.
Last edited by BLUE_KAWI; 04-12-2012 at 06:23 PM.
Read some books and learn the fundamentals. Talk to people but never buy the stocks they recommend.
Start slow and climb up, patience is the key. Wanting to make a quick buck will certainly make you lose all your money.
People talk about making a crap load on the market, but none of them talk about losing money. More people lose money on the stock market than make money especially newbs.
Lastly, only invest money that you are ready to lose because it's a gamble and you could lose all of it.
So, are you a millionaire now?
He's a thousandaire.
all my posts are serious; internet is serious business
I have been researching day trading on forex. A few of my clients are retired stock brokers and by retired I mean they are in their 40's and did well enough to not have to work. There is money to be made for sure but I always hear the same things. Never trade with money you cannot afford to lose being the main one. Find a stock broker with a decent record and pick their brain/get them to show you the ropes.
On a side note, gold and silver are a great investment right now because of the quantitative easing in the US but the only silver eft worth anything is Sprott, imo.
Nobody successful will 'show you the ropes'
They worked too hard for it to just blab all the experience away to a newb.
all my posts are serious; internet is serious business
This is the most ridiculous thing I have ever read.
A newb with titties on the other hand....
it is not a secret ****ing club for christ sakes. They don't give a **** who they show the ropes to. It is not like the movie "Wall Street". Join reality...it isn't that bad...
Thanks for the responses everyone. Thursday-Sunday's crunch time for me at work so I'll read everything over again after the weekend + ask any questions then. Have a good weekend & thanks again
Read the book " the lazy investor", it's a great beginner book.
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